Claim Tip: Water damage and flood damage are often thought of as the same event or peril. In fact, they can be completely different with one being covered and one excluded under common property insurance policies. Be careful with the terminology you use with your insurance company when you call in your claim.
Water Damage Insurance Claims
A water disaster can strike anytime anywhere. Generally the occurrences are sudden and unexpected and the damages are often very difficult to detect depending on the specific nature of the loss. It has been widely reported in the insurance industry that the most frequent type of loss is from water. Events such as frozen pipe leaks, broken pipes, leaks from appliances, sewage backup, water entering from an opening in roofs and other elevations of a building due to heavy or driven rain are typical water losses that are covered under most risk property policies. For those who have had no prior experience in handling an insurance claim, the policy language can be very confusing at best. To receive fair compensation for a loss, it is advantageous to have an experienced claims advocate advising you as the method for adjusting such losses can be highly technical and impact the way the settlement is determined.
Once a water loss has occurred, the single most important thing you need to do is begin proper emergency mitigation. Removal and dry out should begin immediately. Consider employing an experienced public adjuster to guide you through this process. How a water loss is handled in the first 24 hours can be critical in the outcome of your property damage claim. As an example, we often see insurance company adjusters interested in saving money for the carrier neglecting to remove baseboards and other finishings. This prevents air to circulate throughout a building's wall system. Wet carpet needs to be pulled in total or you may be harboring conditions which could lead to further damage or mold conditions. Sticking a blower in an up-lifted corner of carpet will not get the job done as often the padding is soaked and needs to be replaced.
Consider exercising your option to bring in your own water extraction company, restoration specialist, or dry out firm. The carriers preferred vendor is not always the best choice since they may be operating under cost constraints that limit their ability to do the best job. Regardless, it is extremely critical that you DO NOT sign any work authorization forms without an agreement from the insurance company or their representative adjuster to approve the charges. A public adjuster can help guide you through this process.
The next step in determining the extent of the damages involves the use of moisture detectors, hygrometers, and the use of infrared cameras to determine the exact location of the water. If the insurance company adjuster does not follow this protocol, the outcome of the settlement will be greatly impacted and the complete restoration and dry out process of the insured property could be in jeopardy.
Additionally, proper disinfectant products need to be applied to prevent any bacteria, fungi, or mildew from causing further damage. If this step is not adhered to, the insurance company’s next approach may be to examine the claim according to the mold provisions and limitations of the subject policy. This is of great concern due to the fact that mold limitations and coverage are restrictive notwithstanding the complex mold laws, which are vastly different in every state. Please refer to the Mold section of this website for additional details.
You should be aware of something called a Black Water Loss. The handling of this type of loss is completely different and requires special care and treatment. A black water loss results from sewage or other chemical toxins in the water being released in your home or business. Simply drying out this type of moisture is not going to rid your property of these issues. There may be life, health and safety issues that need to be addressed when cleaning up a black water loss.
Any type of water loss generally takes time for the effects of the water damage to show up. Wood and other types of finishes and furnishings may take days to dry. Often separation and splitting will not start to show up until much later. An experienced pubic adjuster at Tutwiler & Associates will work with you and the restoration company to coordinate the very important issues water losses can present in order to protect your damage claim.
Finally, because water damage is the most frequent type of insurance loss and thus cause the greatest expense to the insurance company, we are seeing some insurance companies trying to shift this cost to the policyholder even though the policy covers the peril of water. A new trend is putting language in the policy that says any water loss that is reported past a 14 day period will not covered. If water damage is covered from day one through day thirteen, how does a water loss stop being covered and how do you determine if a water loss is 13 or 17 days old? This is devastating to homeowners, particularly to snowbirds in Florida who are away part of the year or owners away from their property on vacation or for business. Pay attention to this and understand your policy. It is a big deal and could prove to be very costly. Policyholders should be up in arms on this issue and contact their local legislative office and their Office of Insurance Regulation.
Flood Insurance Claims
The peril of flood has traditionally been uninsurable in the private insurance market due in part to the extreme risk and exposure flooding can cause. In 1968 the federal government enacted a law that set up the National Flood Insurance Program (NFIP) to provide assistance to residents and commercial property owners who purchased a flood policy. Today, most all flood matters are run by the private insurance carriers. So keep in mind that your standard property insurance plan does not cover flood. You must buy a separate policy from a private insurer. At the end of the day the U.S. Government will pay back all amounts the private market carrier has paid out plus a service fee to the insurance company who serviced the flood loss claim.
There are many complex issues involved in the NFIP program in terms of filing a flood claim. One of many unique coverage issues relates to the definition of “flood” under the NFIP. As an example, in order to qualify as a “flood” there must be “a general and temporary condition of partial or complete inundation of two or more areas of normally dry land area or of two or more properties (at least one of which is your property) from an overflow of inland or tidal waters; unusual and rapid accumulation or run-off of surface waters from any source; mud flow.” In plain English, a flood is an excess of rising water (or mud) on land that is normally dry. A flood can stem from heavy rains, overflowing rivers, thawing snow, flash flooding and hurricane storms surges. The resulting damage from a flood event can include all types of complex issues, which will require expert analysis in order to prove the damages and support the claim. Our handling of Superstorm Sandy flood claims has proven this out.
Also, be aware that if you have flood damage and have to use a water restoration dry-out company, you need to understand the rules in which FEMA and the National Flood Insurance Programs pays. If not, you may get stuck with a huge bill to pay or a lien on your property. Ever since Superstorm Sandy, these restrictions have become even more onerous. Here are the official FEMA Structural Drying Guidelines.
As public adjusters who deal with flood issues on a regular basis, we recommend you read and understand your flood insurance policy before a loss, as it is limited in amounts and scope of coverage. Remember that the flood adjuster that is sent out by your insurance company typically has no real authority. He or she can only write up a claim and submit it for payment consideration. Please read this article about adjusting a flood claim. While somewhat technical, it will give you an idea of your insurance adjuster is following best practices. If you have a flood loss to your insured property, you need to be very mindful of the 60 day provision for filing a flood proof of loss. This places additional pressure on the insured policyholder to get all their damage documentation together in what can be a very limited amount of time. If this is not waived by an authorized government official (you need to get the printed copy of the waiver) and you do not have your proof-of-loss form submitted within sixty days, it is likely your claim will not be paid!
Naturally there will be numerous insurance claims filed following a major disaster or flood event. As our claims adjusters have witnessed many times before, it may take a very long time for the relief efforts to reach your specific area. One also needs to factor in the amount of claims that will be assigned to the carrier adjusters that will be hired to adjust thousands of flood claim losses. As a result, it may take your adjuster a considerable amount of time before they will have the opportunity to reach your property. In these situations, we recommend being proactive by hiring a public adjuster who can dedicate his/her time to your specific claim in detail so you receive everything you are entitled to.